Friends Provident, a UK life and pension company, offering annuities (to their own customers) amongst their portfolio of products, have seen new business levels fall 27% last year, compared to £751m in 2007. Their total life and pensions income also fell, down 11% to £1,005m APE lat year, from £1,135m in 2007.
These results come as Friends Provident readjusted to its new focus on key areas of business such as group pensions, and also its’ international arm.
Levels of individual pensions business fell because of the withdrawal of products offering initial commission early in 2008. Protection business for the 2008 fell 24% from 2007 levels to £52m on the back of the increasingly weak housing market.
Friends Provident has admitted that its critical illness terms were less competitive than many other providers, with life and critical illness business falling 27% to around £35m.
Their savings and investments and annuities business saw no sales at all in terms of regular premiums in Q4 last year. On a 12-month basis regular premium income in savings and investments fell 50% to £0.7m, while new business in pension annuities remained at zero.
They have stated that levels of savings and investment business remain, should we say, modest. They are continuing to focus on providing annuities for their pensions customers as they reach retirement (not that this is as good for their customers as shopping around for better annuity quotes and the best annuity rates using the open market option).
Friends Provident expect a short-term impact from a reduction in the volumes of new business ahead of an actual planned reduction in acquisition expenses in the UK, which will act to reduce their margins for 2008 compared to 2007.
